The Government has extended the Coronavirus Job Retention Scheme (CJRS) following the announcement of new Coronavirus restrictions in England from Thursday 5 November 2020 to Wednesday 2 December 2020, which will require many businesses to close.
It has also confirmed that those businesses that are required to close will be eligible for business grants of up to £3,000 a month, introduced originally for closed businesses in areas of ‘Very High’ Coronavirus restrictions under the three-tier system.
Meanwhile, the mortgage payment holiday scheme that had been due to end on Saturday 31 October 2020 has been extended so that borrowers impacted by Coronavirus will be able to access a six-month repayment holiday.
Businesses forced to close
The categories of businesses forced to close under the new restrictions are near-identical to those required to close following the initial announcement of ‘Stay at Home’ measures on 23 March 2020, with some limited differences.
The Government has confirmed that the following businesses will be required to close from Thursday 5 November to Wednesday 2 December 2020:
- all non-essential retail, including, but not limited to clothing and electronics stores, vehicle showrooms, travel agents, betting shops, auction houses, tailors, car washes, tobacco and vape shops.
- indoor and outdoor leisure facilities such as bowling alleys, leisure centres and gyms, sports facilities including swimming pools, golf courses and driving ranges, dance studios, stables and riding centres, soft play facilities, climbing walls and climbing centres, archery and shooting ranges, water and theme parks,
- entertainment venues such as theatres, concert halls, cinemas, museums and galleries, casinos, adult gaming centres and arcades, bingo halls, bowling alleys, concert halls, zoos and other animal attractions, botanical gardens;
- personal care facilities such as hair, beauty and nail salons, tattoo parlours, spas, massage parlours, body and skin piercing services, non-medical acupuncture, and tanning salons.
Supermarkets, food shops, garden centres and a limited group of other retailers that sell ‘essential’ goods and services will be able to remain open if they follow COVID-secure guidelines.
Meanwhile, ‘non-essential’ retailers will be able to open for click-and-collect and delivery only.
As was the case during the original ‘Stay at Home’ measures, hospitality businesses, including pubs, bars and restaurants that are required to close may provide takeaway and delivery services. However, in contrast to the previous measures, under the new restrictions, hospitality venues will not be able to provide takeaway’sor alcohol.
Accommodation venues will only be able to remain open for people who have to travel for work and for a limited number of other exemptions.
Coronavirus Job Retention Scheme (CJRS) Extension
The Coronavirus Job Retention Scheme (CJRS) has been extended, just hours before it had been due to close to be replaced by the new Job Support Scheme. Just when business owners were planning based on this new announcements were made on 5.11.2020
The Government had only confirmed that the CJRS would be extended to 2 December at the end of October in response to the new lockdown restrictions, but it has already taken the unprecedented step of extending it further until the end of March for all parts of the UK.
As before, eligible employees will receive 80 per cent of their usual salary for hours not worked, up to a maximum of £2,500 per month.
Businesses will also continue to have the flexibility to use the scheme for employees for any amount of time and shift pattern, including furloughing them full-time if required. (Flexible furlough)
Employers will only be required to contribute for any hours worked and pay National Insurance and employer pension contributions for hours not worked.
The extended CJRS will operate along the same lines as the previous scheme and businesses will be able to claim either shortly before, during or after running payroll.
Claims for November can be made from 8am Wednesday 11 November but must be submitted to HMRC by no later than 14 December 2020.
The Government has said that claims relating to each subsequent month should be submitted by day 14 of the following month. This will ensure prompt payment following the end of the month.
Importantly, neither the employer nor the employee needs to have previously claimed or have been claimed for under CJRS to claim the extended CJRS, as long as other eligibility criteria are met.
Employers are permitted to claim for any for employees who were employed and on their PAYE payroll on 30 October 2020.
This means the employer must have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee.
The Government has also confirmed that employees that were employed and on the payroll on 23 September 2020 who were made redundant or stopped working afterwards can be re-employed and claimed for.
However, the employer must have made an RTI submission to HMRC from 20 March 2020 to 23 September 2020, notifying a payment of earnings for those employees.
The Chancellor said that the extended CJRS would be reviewed in January, at which point the contributions made by the employer to the scheme may be adjusted.
The extension of the CJRS means that the introduction of the JSS Open and JSS Closed on 1 November has been postponed until the CJRS closes.
Job retention Bonus (Scrapped!)
(5.11.2020) The Government will not pay the Job Retention Bonus (JRB) in February as planned and has instead said that it will “redeploy a retention incentive at the appropriate time”.
The JRB was originally intended to encourage employers to keep people in work until the end of January. However, with the CJRS now extended until March, the Chancellor said the goals of this policy no longer apply.
This is disappointing for business owners who are now trading again (albeit many on a reduced basis) who had planned for this to come into cash flow in February.
Businesses that are required to close under the new England-wide restrictions and which are in the business rates system will be able to claim grants of between £667 and £1,500 for each two-week period they are required to remain closed.
The arrangements are the same as those in place for businesses in areas of ‘Very High’ (Tier Three) Coronavirus restrictions through the Local Restrictions Support Grant.
The new grants will pay £667, £1,000 or £1,500 for each two-week period a business is required to shut.
Businesses with rateable values of £15,000 or less will receive £667, those with rateable values of £15,000 to £51,000 will receive £1,000 and those with rateable values of more than £51,000 will receive £1,500.
The scheme will be administered by Local Authorities, with £1.1 billion of funding being distributed on the basis of £20 per head to help them support businesses more broadly.
This scheme applies to England only. However, the Devolved Administrations will receive equivalent funding to distribute as they see fit.
Mortgage Payment Holidays
Following the introduction of the new Coronavirus restrictions in England, the Government has confirmed that mortgage payment holidays will still be available to borrowers impacted by Coronavirus. The scheme had been due to end on 31 October 2020.
Borrowers affected by Coronavirus will be entitled to a six-month mortgage payment holiday. Those that have already benefitted from a mortgage payment holiday will be able to top this up to six months without a record being made on their credit file.
Further details of the scheme are expected imminently.
Government extends Self-Employment Income Support Scheme (SEISS)
The Government had already announced an extension to the SEISS under its plan for local lockdowns, which would ensure that self-employed workers would receive two more grants between November 2020 and April 2021. There had been confusion as to how this scheme would run and this was clarified and updated when the Chancellor announced amendments to the scheme on 5.11.2020.
In a similar vein to the CJRS extension, the Government will take further steps to help the self-employed by increasing the contribution under the SEISS from 55 per cent to 80 per cent over the next three months.
This is the second time that the third round of SEISS grant funding has been increased after the scheme itself was extended for a further six months.
Under the latest change, those eligible for the SEISS grant will be able to claim 80 per cent of three months’ average trading profits, paid out in a single instalment, which will be capped at £7,500.
HM Revenue & Customs (HMRC) has announced it will pay this more generous grant sooner than expected and “in good time for Christmas”. This is thanks to an earlier change, which brings the application period forward by two weeks so that people can submit their claim for the grant from 30 November.
The Government has already announced that there will be a fourth SEISS grant covering February to April. The Government will set out further details, including the level, of the fourth grant in due course.
Government-backed loan schemes
Businesses had already been given an additional month to make an application for the Bounce Back Loan, Coronavirus Business Interruption Loan, Coronavirus Large Business Interruption Loan and Future Fund schemes, allowing them to submit by 30 November 2020.
However, in recognition of the additional financial support that some businesses may require, the Government will now extend the loan application window until 31 January 2021.
Businesses that wish to make an application are encouraged to begin applications soon to ensure they have sufficient time to prepare and submit the required information.
Businesses who applied and drew loans under the bounce back loan scheme but didn’t take the full loan available can apply for a top up. This will be available from 9 November. The maximum loan was the higher of £50,000 or 25% of turnover.
So for example if your business had turnover of £100,000 you would have been eligible for a loan to a maximum of £25,000. If you took a loan of £15,000 you could apply for a top up of £10,000.